This question is sparked by a recent conversation I had. Someone I know asked me why they weren’t rich despite having worked hard all their life and never spending extravagantly. I’m pretty sure it was a rhetorical question but I thought the answer would make a good blog post. In the instance of this particular person it was true that they had worked hard and never spent extravagantly. The reasons the person didn’t get rich are that there job paid just enough to cover modest middle-class expenses. Also the job did not offer a 401k or any type of retirement plan. And what savings there were made were put in investments with poor returns and high expenses. This person never did anything that would have allowed them to get rich.
This made me wonder what does a person need to do to get rich. I believe working hard is part of it but it is clear to me that by itself isn’t enough. To figure out what needs to be done to get rich I thought about the people I know who I consider to be rich or at least well-off. They became rich through three different ways.
- They owned a business.
- They owned real estate investments.
- They worked at a job that paid well above average and put their excess income into investments with a good return.
I probably could have made this just two different ways since the people I’m thinking about that made their money with well-paying jobs also made a substantial part of their wealth through real estate investments. Looking at these three ways to get rich I have to admit that I’m not doing anything to get rich. My blogging is a business but it doesn’t currently have the potential to make me rich. I need to change the potential of my blog and I need to consider the other ways of getting rich as well.
The first and second ways of getting rich can be risky and even the third way has some risk. I’m thinking the reason many people never get rich is because they never take the risk of doing something that can make them rich. What have you done to get rich?